Could Zelira Be Sitting on the Winning Ticket?

Zelira Therapeutics' cannabis-based insomnia formulation could bring the ASX-listed biopharma astronomical revenues.

Zelira Therapeutics (ASX:ZLD) is an Australian-based biopharmaceutical company cannabis company focused on developing a portfolio of proprietary revenue-generating products and a pipeline of candidates undergoing clinical development that are positioned to enter global markets from 2020.

Zelira is targetting a wide array of conditions, giving investors exposure to several different markets such as Parkinson's, autism, dermatology, chronic pain, opioid reduction and insomnia, each of which has a total addressable market of billions of dollars.

The company operates a 'Launch, Learn, & Develop' model which boasts rapid commercialization, and expects several of its formulations to hit the market in the latter half of this year.

Most recently, the company drew widespread attention for its insomnia formulation, ZTL-101 which produced "statistically significant improvements" in Insomnia Severity Index (ISI) scores compared to the placebo.

The Insomnia Trial

Conducted at the University of Western Australia's Centre for Sleep Science, Zelira used a randomised, double-blind, cross-over trial with a total of 23 participants to determine how effective ZTL-101 was in improving chronic insomnia symptoms.

The participants were treated for two weeks using ZTL-101 and two weeks using a placebo, with a one-week-long period of no drug use. Each night, the participants would drop either a single or a double dose of the formulation and record the effects on their sleeping issues.

According to Zelira, Insomnia Severity Index (ISI) scores decreased, on average, by 26% for participants, meaning that factors such as total sleep time, how many times they woke up during the night, and how long it took for participants to fall asleep, all subjectively improved.

We are delighted as these results have exceeded our expectations.

Ex-US markets managing director of Zelira, Dr Richard Hopkins

The principal investigator for the Insomnia trial, Professor Peter Eastwood, stated that Zelira's trial was the "most rigorous clinical trial ever undertaken" using cannabis to treat insomnia conditions.

"The significant improvement in subjective sleep quality and feelings of waking up rested as reported by participants was particularly notable. Positive patient experiences with minimal side effects are critical to the success of any insomnia drug and highlight the potential for ZTL-101 to address a key area of unmet need," Mr. Eastwood added.

"Taken together, these results are comparable to other approved insomnia therapies at a similar stage of development and suggests that ZLT-101 can be developed as a novel treatment for chronic insomnia. This is a very exciting outcome," the Professor concluded.

Upon completion of the trial, some patients reported that they "fell asleep and did not wake up in the middle of the night," and that they "hadn't slept this well in a very long time."

Zelira's shares climbed more than 25 percent following the positive update on the trial.

The Unmet Insomnia Market

Zelira intends to launch ZLT-101 into Australia, America, Germany, and the United Kingdom in the second half of 2020, though even in just the United States alone, the insomnia formulation could be highly lucrative.

Globally, we are the first company to take a full-spectrum cannabis product and test it for efficacy in the insomnia space.

Richard Hopkins, Ex-US markets managing director of Zelira Therapeutics
This image has an empty alt attribute; its file name is image.png
US Market. Source: Zelira Presentation

An estimated 60 million Americans have insomnia, and according to Markets and Markets, The U.S. insomnia market is projected to reach USD 4.24 Billion by 2021 at a CAGR of 4.6%.

Moreover, Insomnia is often coupled with additional negative externalities such as depression, the potential for overdose if the patient is using opioids to treat the condition and economic losses due to absenteeism from poor sleep.

Thanks to strategic partnerships/mergers with TerrAscend/Ilera Healthcare and Advanced Biomedics LLC, Zelira has ample supply and distribution networks throughout the United States which will allow for wide-scale access to ZLT-101.

Being the first cannabis-derived treatment for insomnia gives Zelira a real point of differentiation from its competitors, and the clinical validation of the formula gives it a legitimacy that few other cannabis medicines share.

"Not only do the results mean that Zelira can launch a product for insomnia, the data and the clinical validation from the trial mean that doctors can be confident in prescribing medical cannabis," said Dr. Richard Hopkins, ex-US managing director of Zelira Therapeutics.

Clinical validation is particularly important when one considers that a lack of confidence on the part of doctors can act as a major barrier to medical cannabis prescriptions, therefore if Zelira can gain the trust of healthcare professionals, their products will be prescribed much more liberally.

With clinical validation, a unique formulation, and a total addressable market in the billions, this ASX-listed biopharma could be sitting on a goldmine once ZLT-101 hits the shelves. This is one stock, ironically, that you might not want to sleep on.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.

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